Thursday, 24 January 2013

Fastjet is holding top-level talks with the South African government after several domestic carriers moved to block its acquisition of 1time Airline, citing foreign ownership rules.

The startup African low-cost carrier, which is backed by EasyJet founder Stelios Haji-Ioannou, had signed an option agreement to acquire South Africa's 1time in December 2012, one month after the latter entered provisional liquidation.

Fastjet had planned to resume operating "up to three" of 1time's 12 Boeing MD-80s if the deal could be finalised, as well as reinstating hundreds of employees. The 1time brand would then be phased out as Fastjet aircraft came on stream.

However, it emerged on 23 January that at least three local carriers - state-owned South African Airways (SAA); its low-cost subsidiary Mango; and British Airways affiliate Comair - are now pressuring South Africa's Air Services Licensing Council (ASLC) to block the acquisition.

Tuesday, 1 January 2013

The recent decision by GACA, Saudi Arabia's civil aviation authority, to delay awarding new domestic air licences came as little surprise to people familiar with the kingdom's heavily regulated, duopolistic market. The much-vaunted liberalisation process had advanced as far seven bidders being shortlisted - among them consortia comprising Gulf Air, Bahrain Air and Qatar Airways - but it became clear that the familiar stumbling block of regulatory price intervention was hindering a deal.

"GACA needs more time to choose the best operating models after it completes the analysis and evaluation of the bids that were received from the companies," the authority said in late November, making no reference to the widely reported withdrawal of several bids in protest at the country's domestic fare cap. Earlier that month, GACA had insisted it was in the final stages of issuing the licences...

The collapse of South Africa’s 1time Airline in November 2012 was first and foremost a tragedy for the 1,000 employees it left jobless, few of whom can expect to be reinstated permanently if newcomer FastJet completes its proposed takeover of the defunct carrier. In an emotive statement announcing the failure of the business rescue plan, chief executive Blacky Komani spoke of the “end of a dream and an era for all of us”.

But, looking beyond the human toll of the low-cost carrier’s (LCC) failure, the South African media has been quick to ask why 10 of the 11 independent airlines created since deregulation in1991 have collapsed...

With the low-cost carrier (LCC) market transforming how Europeans think about air travel in the space of just two decades, it is little wonder that Stelios Haji-Ioannou, the founder of EasyJet, has been keen to export his philosophy to other corners of the globe.

Drawing inspiration from EasyJet’s brand name – not to mention headhunting several of its former executives and even leasing one of its old aircraft – the Greek Cypriot tycoon’s vision became reality in November 2012, when the inaugural FastJet flight took off from the Tanzanian capital Dar es Salaam to the northern city of Mwanza...